Can´t Hear You. Scream Louder Please
How can anyone possessed of the faintest sense of social justice not thrill to the Occupy Wall Street movement now spreading throughout the country? One need not be religiously doctrinaire to recognize this as a “come to Jesus moment” when the money-changers stand exposed and the victims of their avarice are at long last offered succor.
Not that any of the protesters have gone so far as to overturn the tables of stockbrokers or whip them with cords in imitation of the cleansing of the temple, but the rhetoric of accountability is compelling. “I think a good deal of the bankers should be in jail,” one protester told New York Times columnist Andrew Ross Sorkin. That prospect has evidently aroused concern in an industry that has largely managed to escape judicial opprobrium.
“Is this Occupy Wall Street thing a big deal?” the CEO of a major bank asked Sorkin. “We’re trying to figure out how much we should be worried about all this. Is this going to turn into a personal safety problem?”
It should pose a threat, not because peaceful demonstrators will suddenly morph into vigilantes fatally damaging their cause with violent action, but rather because government prosecutors should fulfill their obligation to pursue justice and incarcerate some of the obvious perps. As Sorkin conceded, in one of the rare instances of the business press attempting to understand the protesters: “the message was clear: the demonstrators are seeking accountability for Wall Street and corporate America for the financial crisis and the growing economic inequality gap.”
Sorkin ended his account with snarky comments about the protesters using ATM machines and about the ever-admirable Code Pink founder Jodie Evans having flown a commercial airline to get across the country to the demonstration. He also offered the predictable dismissal that could be made about any genuinely spontaneous movement, that “the protesters have a myriad of grievances with no particular agenda.”
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But ignore the mass media’s nitpicking and mostly derisive coverage and wonder instead why it took so long for this grass-roots movement to emerge as an alternative to the tea party, which exonerates the thieves of Wall Street. With 25 million Americans unsuccessfully looking for full-time work, 50 million experiencing mortgage foreclosure and an all-time high of 46.2 percent living in poverty, including 22 percent of all children, isn’t it logical that the faux populism of the tea party be confronted with a progressive alternative?
The Republican narrative, which the media have treated with considerable respect, blames “big government” for our ills, not when Washington bails out the banks, or feeds the maws of the military-industrial complex, but only when it might go to the aid of the victims of the financial conglomerates.
It was the Wall Street lobbyists, with the complicity of Democrats and Republicans in Congress, who caused the Great Recession by destroying a sensible regulatory system—one that had kept U.S. banking reliable since the Great Depression—and by legalizing the securitization of homes. But the Wall Street titans escaped being held accountable for the excesses of their greed: They got their lackeys in government to throw them a lifeline bailout while their victims among the unemployed and foreclosed were abandoned.
“We bailed out the banks with an understanding that there would be a restoration of lending. All there was was a restoration of bonuses” is the way Nobel Prize-winning economist Joseph Stiglitz described it in speaking to the protesters on Wall Street.
It was a thought echoed by George Soros in expressing his support for the demonstrators: “The decision not to inject capital into the banks, but to effectively relieve them of their bad assets and then allow them to earn their way out of a hole leaves the banks bumper profits and then allows them to pay bumper bonuses.”
Those bonuses are part of a practice throughout the corporate world that has far less to do with corporate performance than with the power spoils of CEOs. As The Washington Post points out, “The gap between what workers and top executives make helps explain why income inequality in the United States is reaching levels unseen since the Great Depression.” While the median pay for top corporate executives has quadrupled since the 1970s, the pay of non-supervisory workers has declined by more than 10 percent.
“Ultimately this is about power and greed, unchecked,” Jodie Evans told the Times’ Sorkin, and it is a protest that the columnist’s newspaper, along with the rest of a mainstream media that editorially enthused over the radical deregulation that unfettered Wall Street greed, should now honestly cover.
America’s ‘Primal Scream’
By NICHOLAS D. KRISTOF
IT’S fascinating that many Americans intuitively understood the outrage and frustration that drove Egyptians to protest at Tahrir Square, but don’t comprehend similar resentments that drive disgruntled fellow citizens to “occupy Wall Street.”
Nicholas D. Kristof
There are differences, of course: the New York Police Department isn’t dispatching camels to run down protesters. Americans may feel disenfranchised, but we do live in a democracy, a flawed democracy — which is the best hope for Egypt’s evolution in the coming years.
Yet my interviews with protesters in Manhattan’s Zuccotti Park seemed to rhyme with my interviews in Tahrir earlier this year. There’s a parallel sense that the political/economic system is tilted against the 99 percent. Al Gore, who supports the Wall Street protests, described them perfectly as a “primal scream of democracy.”
The frustration in America isn’t so much with inequality in the political and legal worlds, as it was in Arab countries, although those are concerns too. Here the critical issue is economic inequity. According to the C.I.A.’s own ranking of countries by income inequality, the United States is more unequal a society than either Tunisia or Egypt.
Three factoids underscore that inequality:
¶The 400 wealthiest Americans have a greater combined net worth than the bottom 150 million Americans.
¶The top 1 percent of Americans possess more wealth than the entire bottom 90 percent.
¶In the Bush expansion from 2002 to 2007, 65 percent of economic gains went to the richest 1 percent.
Members of labor unions and others join Occupy Wall Street during a march in Lower Manhattan as they arrive near Zuccotti Park, on October 5, 2011 in New York. (AP Photo/Craig Ruttle) # 
As my Times colleague Catherine Rampell noted a few days ago, in 1981, the average salary in the securities industry in New York City was twice the average in other private sector jobs. At last count, in 2010, it was 5.5 times as much. (In case you want to gnash your teeth, the average is now $361,330.)
More broadly, there’s a growing sense that lopsided outcomes are a result of tycoons’ manipulating the system, lobbying for loopholes and getting away with murder. Of the 100 highest-paid chief executives in the United States in 2010, 25 took home more pay than their company paid in federal corporate income taxes, according to the Institute for Policy Studies.
Living under Communism in China made me a fervent enthusiast of capitalism. I believe that over the last couple of centuries banks have enormously raised living standards in the West by allocating capital to more efficient uses. But anyone who believes in markets should be outraged that banks rig the system so that they enjoy profits in good years and bailouts in bad years.
The banks have gotten away with privatizing profits and socializing risks, and that’s just another form of bank robbery.
“We have a catastrophically bad misregulation of the financial system,” said Amar Bhidé, a finance expert at the Fletcher School of Law and Diplomacy at Tufts University. “Its consequences led to a taint of the entire system of modern enterprise.”
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Economists used to believe that we had to hold our noses and put up with high inequality as the price of robust growth. But more recent research suggests the opposite: inequality not only stinks, but also damages economies.
In his important new book, “The Darwin Economy,” Robert H. Frank of Cornell University cites a study showing that among 65 industrial nations, the more unequal ones experience slower growth on average. Likewise, individual countries grow more rapidly in periods when incomes are more equal, and slow down when incomes are skewed.
That’s certainly true of the United States. We enjoyed considerable equality from the 1940s through the 1970s, and growth was strong. Since then inequality has surged, and growth has slowed.
One reason may be that inequality is linked to financial distress and financial crises. There is mounting evidence that inequality leads to bankruptcies and to financial panics.
“The recent global economic crisis, with its roots in U.S. financial markets, may have resulted, in part at least, from the increase in inequality,” Andrew G. Berg and Jonathan D. Ostry of the International Monetary Fund wrote last month. They argued that “equality appears to be an important ingredient in promoting and sustaining growth.”
Inequality also leads to early deaths and more divorces — a reminder that we’re talking not about data sets here, but about human beings.
Some critics think that Occupy Wall Street is simply tapping into the public’s resentment and covetousness, nurturing class warfare. Sure, there’s a dollop of envy. But inequality is also a cancer on our national well-being.
I don’t know whether the Occupy Wall Street movement will survive once Zuccotti Park fills with snow and the novelty wears off. But I do hope that the protesters have lofted the issue of inequality onto our national agenda to stay — and to grapple with in the 2012 election year.
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